ROI is one of the hottest broads strutting its stuff on the social media block. Hopefully you know her–the one with nice big numbers in all the right places, and a lean routine to maintain this figure. What is ROI? It’s an initialism that represents “Return on Investment”. According to Investopedia, Return on Investment is:

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

Formula:

ROI’s application to social media is unique to the company and the company’s goals. ROI does not have to be measured in dollars, directly, either. There are four major sectors of ROI, according to @JerryAllocca, author of Connected Culture. I won a copy of his book today at the Fair Media Council Social Media Boot Camp. Here are the four areas:

Financial

Risk Management

Digital Footprints

Brand

The first key [to results and happiness] is to integrate your social media efforts into the bottom-line of the business. (Extensive research required.) Check out Basics for the Digital Marketer (Chris S. Penn). When integrating into the bottom-line, “social” efforts will inherently be integrated into the business’ funnel–helping to earn money. This can be measured, and this is why measurement is essential to success.

More on Measurement
Christopher S. Penn–@cspenn on Twitter–mentioned in his @Radian6 webinar Marketing White Belt: (1) people migrate, and (2) fragmentation. We are not static beings, especially in digital mediums. Constant testing, utilizing metrics, and measurement is necessary to validate your efforts.

“_ _ I” – what were the first two letters?
What’s more, the I in ROI is what sticks out to non-social media mavens. Be wary of “expert” rhetoric, according to Craig Yaris, Chief Social Marketer at EsquireTech Solutions. Promote and create understanding and openness, says Jeff @namnum and John Doyle (@14str8). The R is elusive, according to ROI social media panel at Fair Media Council events. To manage business interests and your happiness, define goals and agree to said goals with your organization’s silos.

My ROI: your feedback
What’s your experience with ROI? What metrics do you utilize to measure ROI? Be positive, be negative, be neutral! Just be you, and do your thing.